Plaid calls for extra economic aid for Wales

PLAID Cymru has called on the UK Government to give Wales extra economic aid to match help already pledged to Northern Ireland as concern mounts about the likely impact of next month’s Spending Review.

PLAID Cymru has called on the UK Government to give Wales extra economic aid to match help already pledged to Northern Ireland as concern mounts about the likely impact of next month’s Spending Review.

Material published by the Treasury at the time of the Emergency Budget in June revealed that the Westminster coalition had accepted the need to introduce special measures for Northern Ireland.

A report will be published this autumn outlining plans to reduce corporation tax and to establish economic enterprise zones in the province.

Plaid’s general argument for special measures is based on data showing there has been a widening “North-South” economic divide in the UK in recent decades – with Wales bracketed in a “North” category that includes the North of England, Scotland and Northern Ireland.

Statistics suggest there has been increasing wealth polarisation, creating a “two-step economy”, with traditional manufacturing and heavy industry regions like Wales becoming increasingly dependent on public spending.

Inner London is the richest part of the whole EU, while West Wales and the Valleys is among the poorest, qualifying for maximum levels of European aid. The gross value added figure of £12,617 per head for the Welsh region in 2007 – the lowest in the UK – was only 22% that of inner London.

“Consequently, under Tory and Labour administrations, there has been increasing regional and individual wealth polarisation. Inner London, despite the recession, continues to be the richest part of the EU, while West Wales and the Valleys, just a few hours down the M4, is among the poorest.”

Mr Edwards, the MP for Carmarthen East and Dinefwr, said the folly of this “one-eyed approach” was exposed by the collapse in the banking system and the subsequent recession.

“As a result of the recession and the banking bailout, the UK Treasury has accumulated an unsustainable deficit,” he said.

“The new UK Government has set as its main political objective clearing the deficit before 2015. We in Plaid Cymru believe this level of retrenchment is far too quick and that the deficit should be viewed over the medium term.

“Too rapid a consolidation threatens future economic growth and will inevitably have a disproportionate effect on those areas of the UK that are more reliant upon public spending. Even if the UK Government is successful, the gain will mostly be felt in the South-East of England, while the pain will be concentrated in traditional manufacturing areas such as Wales.

“If the UK Government is to embark on its stated aims it is essential that countervailing measures are introduced to allow the private sector in the poorest parts of the UK a competitive advantage.”

Mr Edwards added: “As the UK Government is intent on pushing ahead with its austerity programme, it is essential that the poorest parts of the UK are given a competitive advantage to stimulate private sector growth. The UK Government has accepted the case in the case of Northern Ireland. In the Emergency Budget Red Book, the Treasury has committed to publishing a report in the autumn outlining plans to reduce corporation tax and to establish economic enterprise zones in Northern Ireland.

“For Wales such fiscal measures should include the devolu- tion of corporation tax or its setting on a regional basis; the creation of economic enterprise zones; the electrification of the railway from London to Swan- sea; and increased political powers for the Welsh Government over economic policy.

“If the UK does not introduce such measures then ... the economic and social ramifications in areas such as Wales will be severe.”

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